Economics: Religion Masquerading as Science

[There's a] growing awareness that we are all being targeted in economic warfare – all of us – your children and parents, friends, neighbors; since we can’t escape this struggle we’d better understand, and learn how to fight and win it!

This war is real and becomes more obvious in different ways every day. I am not referring to Iraq but to the deeper struggle over the direction of mankind that is more religious in nature. Not the fights with the religious right wing now threatening America’s political process. Those are real problems, but now we focus on a more fundamental battle with the new clandestine religion known as “economics”!

A year ago, Zbignieuw Brezinski, Carter’s National Security Advisor said the attempt to establish a new world order was doomed to failure because there was no universal religious underpinning to it as existed in the old world order – the Roman Empire, with its emperor worship and later its Christianity.

Brezinski was probably right that it would fail, but overlooked that this new order does have a universal religious belief system called Economics. It has its own god, the Market; its own priesthood of Economists; its temples, Banks until recently, clothed in ancient temple architecture.

An example of the religious nature of economics is the promotion of market as god. We are warned:

Don’t try to legislate on the market; it is stronger than our puny laws. It is omnipotent

Don’t try to regulate outcomes, the market with input from all of its participants always knows better. It is omniscient

Do the right things and the market will reward you, the wrong things and you’ll be punished. It is beneficent

Omnipotence, omniscience and beneficence are the attributes of a god, not a mere device for buying, selling and exchanging. - A strange deity that abhors morality and where even the most atheistic libertarians have been suckered into believing in the market’s “invisible hands,” like multiple Holy Ghosts.

Economics used to be based in morality. From 1100 to 1500, philosophy, religion and economics were combined in one group – the Scholastics - church philosophers including Albert the Great and Thomas Aquinas who defined morality in commercial dealings. They focused on “the just price” and on usury. Usury was not merely taking interest. It was always permitted to take interest in certain ways such as the Societas, and Census. The main condition was that there be real enterprise risk to the lender. They were really investors (see Lost Science of Money, Ch.7).

The scholastics distinguished between earning interest and the detested usury: usury being a misuse of the money system, similar to the Islamic concept of riba.

Their mentor from across the centuries was Aristotle not the bible and they drew conclusions based on his authority and on their observations; but mostly on logic and deduction, which is appropriate for moral questions.

Aristotle was the bulwark against usury writing: “The most hated sort [of wealth getting], and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest.” (1258b, politics)

Those promoting usury found it necessary to attack Aristotle. Francis Bacon attacked: “Aristotle so confident and dogmatical…barren of the production of works for the benefit of the life of man.” (works, p.850)

Jeremy Bentham’s 1787 defense of usury attacked: “... ‘to trace an error to its fountain head is to refute it’…. if our ancestors have been all along under a mistake... How came the dominion of authority over our minds?”

One would think he is going to cite the strong Old Testament admonitions against usury. But he ignores the biblical prohibitions completely; he is after Aristotle: “Aristotle: that celebrated heathen…had never been able to discover in any one piece of money any organs for generating any other such piece. Emboldened by so strong a body of negative proof he ventured… an universal proposition, that all money is in nature barren...”

Bentham foisted the present misdefinition of usury on us, as taking more interest than normal. He promoted the idea of Utilitarianism which I summarize as forget morality – utility is what counts!

Modern economists kept the scholastics’ theoretical method using deductive logic but they ditched morality in favor of Bentham’s Utilitarianism. Despite the fact that the theoretical method works better on moral questions. Despite the fact that morality – or fairness - is a most useful element in any good society. Today economics primary effect is to justify forms of usury and empower those misusing the world’s money systems.

This continues despite the fact that over a century ago the great reformer Henry George destroyed utilitarianism in one sentence, writing: “[economics]…a science which…seems but to justify injustice, to canonize selfishness by throwing around it the halo of utility…” (Study of political economy lecture p. 6)

George noted the purposeful corruption of economics by: “…a powerful class whose incomes could not fail to be endangered by a recognition…that what makes them…wealthy is…only robbery, must from the beginning…have beset (political economy’s) primary step…” (SPE 140; also see 134, and 138)

Yet everywhere we look today, we see our world has come to be ruled by this new clandestine religion often referred to as Monetarism. How did it happen? Through control of the money system, society’s greatest dispenser of justice or injustice….

Power-hungry elements from ancient times to the present have dominated through the money power. Their main weapon has been the manipulation of language and thought, where definitions serve as heavy artillery….

By misdefining the nature of money, corrupt interests seized control of the money power, dominating society and deforming mankind in the process (see Lost Science of Money)

Economics has never properly defined money. They are still arguing whether money is a concrete power in commodities like gold and silver, or an interest bearing credit issued by private banks, or as we conclude from historical cases, money is an abstract social power - an institution of the law, having value because government receives it in taxes.

Economists use poor methodology – an over reliance on theoretical reasoning. We have two basic methods of gaining knowledge – through reason and through experience. Alexander Del Mar the great monetary historian noted:

"As a rule economists...don’t take the trouble to study the history of money; it is much easier to imagine it and to deduce the principles of this imaginary knowledge."

This failure becomes staggering when combined with their reluctance to accurately define the terms of their theories. This is not new – in 1827 Malthus wrote a book to complain about poor definitions in political economy, noting: “it is quite astonishing that political economists of reputation should be inclined to resort to any kind of illustration however clumsy and inapplicable, rather than refer to money.” But when Malthus presented 60 “better” definitions; a definition of money is glaringly absent.

Fortunately, Aristotle outlined a science of money in 330BC still valid today: “all goods must therefore be measured by some one thing...now this unit is in truth, demand, which holds all things together...but money has become by convention a sort of representative of demand; and this is why it has the name nomisma - because it exists not by nature, but by law or binding custom [which in Greek is nomos].”

Thus Aristotle identified money as an abstract legal power - a social invention. Its essence is not tangible wealth, but a power to obtain wealth – a crucial distinction. Plato agreed and advocated such fiat money for his Republic. We find these key principles used in both Greek and Roman systems….

Right from Aristotle’s time, we find evidence of the great battle over the control of money. This private vs. public struggle over the monetary power remains the main political divide to this day.

We summarize it as Adam Smith vs. Aristotle. Smith helped erect a mythology of money obscuring the science of money, by attacking the legal concept of money in his definition:

“By the money price of goods it is to be observed, I understand always, the quantity of pure gold or silver for which they are sold, without any regard to denomination of the coin.”

Smith’s primitive misdefinition of money as a commodity insinuated a mythology of money into economics in 1776, from which it has not recovered. He did this despite the earlier work of Berkeley, Locke and Franklin, from 1729 to 1735, in his library which more accurately identified money’s abstract nature….

Bad as Smith was monetarily, there is now an even worse effort to completely remove the concept of money from our language and replace it with a concept of credit. Then, monetary reform will actually become “unthinkable” because we won’t have the monetary concepts necessary to frame our reform thoughts. That’s the opponent’s game plan, but the AMI won’t allow it – with your help we are reviving the concept of money!

24 Comments:

I think you hit the nail of the head. Economics is manipulative crap used to justify greed and the corporate terrorists enacting class warfare against the poor (the class formerly known as the middle class).

Myself, I never did well in basic economics because I always suspected that it was some sort of sick brainwashing crap.

But, economics is the most important science/art for anyone to learn. It's the art of survival. If you don't learn how it works, you die or you become exploited and enslaved.

They deliberately make the subject confusing for people. Lewis Black made that perfectly clear in his stand up act. His economics class was so early in the morning that he couldn't concentrate and he accused his teacher of doing it deliberately to keep it a secret. He was right.

By far the best introduction to the monetary system I have ever read is "The Money Myth Exploded" by Loius Even. It's a must read for everyone!

I'm talking more about the economics 101/102 basic brainwashing class that is taught in most universities. It is kind of similar to government 101/102 that is basic brainwashing. Then if you take the more advanced classes you learn that what you were taught in 101/102 was absolute rethug lies.

Modern economics is in fact monetarist theory, not the social science of the creation and distribution of wealth in society.

This is by design. The owners of the system have created a self perpetuating cash machine, that transfers all wealth and political influence to them (I am from the UK - witness both political parties funded by "Hedge Funds").

This is simply the old "Shareholder value" concept of institutionalized usury and slavery as the ruling political economic paradigm.

Ironically enough, the US constitution and Hamilton/Lincoln/FDR tradition itself stands in direct opposition to this feudalistic notion of the invisible hand and similar irrational dogma.

We must fight to remove the private bankers' control of our national institutions before they put all of US through 1933 Germany style receivership in defense of their collapsing economic system.

Economics taught, in universities and college, are about 90% ideological and 10% scientific and 0% morality!

http://www.acton.org/publicat/occasionalpapers/ratzinger.html

As blogers have stated on other sites:

"from Deuteronomy onwards we find the teaching that it is correct to lend money at interest to non-co-religionist but not to one's own. It is specially stated that this will bring the other nations to a position of subordination."

Absolutely. Usuary is also a method of war:

"From him demand usury, whom you desire to harm. From him exact usury, whom it would not be a crime to kill. Where there is a right of war, there also is a right of usury."

I am a day-evening student at a Liberal arts college in Allentown PA called Muhlenberg college. In defense of the 5% of Universities and colleges who teach a non-factbased dichotomy economics courses, I have to say that we (the 5%) will be the survivors and the educators of the future, Forget the big mid-western colleges because they can continue to espouse the incorrect and soon to be defunct economic style in use today.

"The Money Myth Exploded" must have been written by a banker. True, it appears to despise bankers, and I agree with a lot of what is said about fiat money and banking. But it tries to demonize gold, which is what bankers always do because it infringes their ability to have fiat currency. The island story is a metaphor for society and a simplification for the purpose of understanding the economy. In a small group, a system of credits would be workable, because it would be easy to enforce accountability. Everybody knows everybody and what all the agreements are. In a small society, an even better, and simpler, system is just talking to each other and making agreements about trading and delivering things in the future. In a complex society, the system of credits would have to be administered and enforced by some group - guess who? Bankers, or people of some other name, but the effect would be the same - the system would be goosed by the people running it to their advantage and the disadvantage of others. It would be far too complex a system for every single person to understand and ensure the system is not being used in a way that favours others over their own self. The great thing about gold is that when the bankers screw you over by printing money and thereby devaluing your savings, you can trade your fiat currency for gold and thereby say a little "fuck you and your fucking worthless fiat currency, until you get more discipline, or, honesty."

I read Stephen Zarlenga's speech at the US Treasury on Dec. 4, 2003 (at least some of it). I don't know all of the history he refers to, but I do know enough of some bits to know that quotes in a self-serving manner, and includes lots of stuff merely to give negative connotations to the stuff he doesn't want you to do, and positive to what he does what you to do. Did he write "Money Myth Exploded"? If so, I don't recall the islanders creating a legal system - is that what they needed for paper money to function properly? All that guy is arguing for is a goverment power grab, to take it back from the banks. Whoop-dee-doo. Government will love that, but from the point of view of the average person, nothing is solved, no problems are fixed, its just a matter of "meet the new boss, same as the old boss". You seriously think government will manage money to achieve social justice, or equality or fairness or anything that is good for average people? I guess you're not familiar with current events, or history, or maybe you are an alien from another solar system popping in for a visit?

"There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing."

Circular. It's not a matter of how government could act, it's a matter of how government does act. I still think the public vs. private debate doesn't get to the heart of the matter - I will say it might be good to stop private control of money and hopefully thwart Paul Warburg and his ilk's desire to install the one world government. Gold and/or silver backed money is better than fiat.Commodity money derives value from people realizing it (the commodity) has value, while fiat money is deemed "valuable" by force and threat of jail. Hoarding and deflation may be important problems in a commodity money system, but the problem of limiting supply/printing of currency in fiat system is far more serious and damaging to average people. Fiat money is a wonderful thing, if you own the printing press; and its the worst kind of money if you do not own the printing press.

It's not circular. It's perfectly logical. Don't throw out the baby with the bath water.

Turning money into a commodity IS the problem. Usury is the problem. And of course, creating money for no productive purpose is also a problem, but it's rooted in the desire to collect interest from loaning it.

This isn't anything revolutionary. This is an age old problem since the invention of money as a vehicle for exchange. There are people who will always try to monopolize it, either by controlling its creation at the press, or its creation in the gold mines.

I wouldn't actually kick Louis Even in the nuts, because the picture of the guy who supposedly wrote "Money Myth Exploded" portrays a friendly looking, maybe even honest person, so I doubt he came up with MME; I think "Louis Even" is a pen-name, it sounds made up, something like "Even Steven". What really disgusts me about MME is that it tries to sell a monetary system to average people by saying it will protect those average people from predators, when in practise it is a near certainty that the MME system will allow predators to do those average people harm. If people believe the end message in MME, it just shows that people don't understand money, that it is important for people to understand money and the effects of various monetary systems.One question: Why does Stephen Zarlenga believe that a commodity money system which is just a step above a barter system is actually bad? He implies it by calling barter "primitive". That is just an insult, it is not a reason."If you are always trading in 'things' it's just an advanced form of barter" - For what reason is that undesirable? It seems to me that such a system prevents concentration of power in an authority. Do you agree that power corrupts, and therefore any system which acts to dilute power is desirable for the vast majority of people?

On your earlier post, "There are people who will always try to monopolize it, either by controlling its creation at the press, or its creation in the gold mines." Mines do not create gold. If that were true, there would be no need to locate gold deposits, one would simply have to dig a mine, and voila! gold! The amount of work to find and extract gold is one reason for its value.

Gold is created inside stars at the end of their "life". This is not a small difference. It is directly related to the point I made earlier, that an important difference between fiat money and commodity money is how easily the supply, and therefore the value, can be changed. Gold mining increases the supply of gold by 1% annually, and gold miners do not control gold once it is out of their hands. Fiat currency in the States has been created at the rate of 8% per year since about the 50's and since it is fiat, it is legally possible, at any time, to declare the currency worthless (but, say, temporarily redeemable for a new currency... This might happen - it could be used to negate the problem of foreign ownership of US currency).

The different percentages over time mean vastly different changes in value. Does the average worker receive a raise of 8% per year every single year, as a rule, and without request or a fight? When people talk about the poor getting poorer, and that families need two income earners these days just to get by, perhaps a clue as to why that is can be found in the rate that the fiat money supply is increased.

I think someone earlier pointed out that in the 1500's a sudden and large increase in the supply of gold caused a huge inflation. Such rapid changes in the supply of gold are unlikely today. But large changes in supply of fiat are simple and taking place right now.

As for usury, not many people would be against that. But no interest rate at all? I'm not a banker, so I'm not against the idea, but, in such a system, what incentive would anyone have to lend money to anyone else? Do you propose eliminating any form of money lending?

the effort it takes to extract gold is one reason used to attempt to justify the return a gold-digger gets when he sells gold as a commodity. But, it's real value is not so much because it's pretty, or because it can be used in industry, but because it is universally recognized as being INTERCHANGEABLE with other things of value.

So, in the end, the fact that it's harder to come by than fiat bills, doesn't in and of itself make it more desirable. Indeed, its scarcity is what made the adoption of fiat bills inevitable. The massive amount of trade that takes place today in the world would simply not be possible if we had to depend on exchanging gold coins. As much as advocates of gold hate to admit it, this is a cold hard fact.

True, the scale of the fraud would likewise not have taken place. But, that is NOT the point. The point is that not only can the production and control of gold be monopolized, just like fiat bills, but also, using gold would not satisfy nearly as much economic activity that fiat bills do - albeit under the iron fist of debt. So, we would have many of the evils of fiat (interest based debt), without any of the benefits of a currency that's easily expanded WHEN IT'S PRODUCTIVE to do so. That is the key.

The solution is to eliminate the private creation of money and eliminate its ABUSE as a commodity. I assure you, interest is nothing but exploitation of people who are deprived of access to it. After all - money doesn't grow on trees - or does it?

Right now the US government is goosing all the economics figures it puts out to make the economy look better than it really is, with the belief that perception is reality and therefore if people are persuaded the economy is doing well, then the economy will do well.

Unfortunately for the government and the people of the United States, reality does exist, and not only will this game of deluding people come to an end, but the longer it takes to come to an end, the more devastating it will be for people.

This process is occurring now. If you put control of the supply of money into any human hands, private or public, it will be abused sooner or later, causing pain for anyone who uses the currency. Most people do not deserve that pain, because they are not at fault, but a fiat system permits this result.

Regardless, today's scary question is, what about all the exotic derivatives the banks have been creating? Their notional value is over 300 Trillion dollars. That value equates to a quarter million dollar home for every group of 5 people on the planet. Would public control of printing money have prevented this problem? I don't know, maybe it would have.

We can be very certain that today's money and financial system will create the most terrifying social meltdown and utter devastation of most if not all people in any non-third world society; and this situation came about under a system of pure fiat currency (since Nixon closed the gold window in 1971).

If we aren't all nuked, a new system is going to be built. Problem number one with the old system was that it was based on fiat. We have known fiat currency inevitably leads to disaster at least since 1720 (earlier for the Chinese). It would be nice to remember this lesson when building the next system

I can see that you are a die hard gold advocate. I am convinced that gold is not the answer. Though I wholeheartedly concede that the way fiat has been manipulated and abused is disastrous and has proven to be the worst scourge that has ever touched mankind.

Nevertheless, I remain convinced that it is not fiat per se that is evil, but the principles (or lack thereof) by which it is administered.

I noticed that adam smith was mentioned in this article, adam smith wealth of nations is probably a book you have heard of, its not as easy to find in book shops as it never was popular as titles such as John Maynard Keynes in recent times but I have located a free copy on the internet if this helps